Little is known about the formation of the interventricular septum (IVS), a central event during cardiogenesis. Here, we describe a novel population of myocardial progenitor cells in the primitive ventricle of the mouse embryo, which is characterized by expression of lysozyme M (lysM). Using LysM-Cre mice we show that lysozyme expressing cells give rise to the IVS and to a part of the left ventricular free wall, demonstrating that these heart regions are developmentally related. LysM+ precursors are not of hematopoietic origin and develop in the absence of transcription factors that regulate lysozyme expression in macrophages. LysM-deficient mice lack an overt cardiac phenotype, perhaps due to compensation by the related lysozyme P, which we also found to be expressed in the developing heart. Direct visualization of lysM expression, using LysM-EGFP knock-in mice, showed that ventricular septation is initiated at embryonic day 9 by the movement of myocardial trabeculae from the primitive ventricle towards the bulbo-ventricular groove and revealed the dynamics of IVS formation at later stages. Our studies predict that LysM-Cre mice will be useful to inactivate genes in the developing IVS.